Sessions, the Cole Memo, and PotCoin

Recently, the US Attorney General, Jeff Beauregard Sessions, rescinded Obama-era memos which allowed states that had legalized marijuana (either recreationally, medically, or both) to grow and operate their businesses without too much fear of federal government intervention. While we could talk for hours about this questionable decision from a man who has championed himself as a states’ rights advocate in the past, I wanted to focus on what it may mean for markets and for a cryptocurrency dedicated to the cannabis industry, PotCoin.

Sessions’ decision may have implications for PotCoin

PotCoin is an altcoin that was created to facilitate transactions and banking for the legalized cannabis industry. It was meant to be an option for dispensaries and growers who cannot have a traditional bank account for their business, since federally insured banks do not want to (or cannot legally) hold pot money. This is because on the federal level, marijuana is still a Schedule I drug in the United States. The Obama-era memos only directed that federal resources not be used to pursue marijuana “crimes” in states that had voted to legalize.

So, PotCoin may have been just as dependent on those memos as the entire legal cannabis industry in the United States. Thus, the fate of a coin with a US$83.5 million market cap (at the time of writing) may currently be threatened. Which is a shame, considering that the project is rather interesting and has performed some fun marketing campaigns such as sending Dennis Rodman to North Korea (one of the only countries in the world where marijuana is completely legal). But there may be hope yet for this cheeky altcoin and the industry on which it relies.

Sessions may have just forced the hand of congress

It may sound crazy, but perhaps removing the Obama-era memos makes an even stronger case for Congress to push forward with removing marijuana as a Schedule I drug. Too many states are receiving massive amounts of revenue from the legal cannabis industry to just let that go, and like I already mentioned, even a somewhat unknown cryptocurrency is now worth US$83.5 million. A truly massive amount of money is being generated by the legal cannabis industry, enough that I imagine states will put up a fuss if anyone tries to take that away.

Tangentially connected industries are also being affected. As mentioned in the linked article above, Miracle Gro’s (a fertilizer company) share prices dropped a whopping 5% after Sessions made his announcement. While I realize 5% is nothing for us crypto-geeks, in traditional markets, that’s enormous.

5% crash highlighted with a poorly drawn circle

SMG’s share price has since recovered a bit, but it still demonstrates that cannabis has a butterfly effect on many industries. When people, corporations, and states start to lose money, there is usually a backlash, and I wonder if this will be the push that Congress needs to legalize the cannabis industry entirely.

About The Author

Dariusz is a Digital Anthropologist who has been closely following the world of cryptocurrencies since 2014. He has been somewhat of a crypto-evangelist, trying to educate more people on the exciting realm of cryptocurrency. During his time at University College London, his Master's dissertation focused on how communities inhabit, modify, and create virtual places via social media.